1 The Story
Simple rules, rigorously tested
Mebane "Meb" Faber is co-founder and chief investment officer of Cambria Investment Management, and one of the most-read writers on rules-based, quantitative investing.
Faber graduated from the University of Virginia and worked as a biotech equity and quantitative analyst before co-founding Cambria. His widely-cited paper A Quantitative Approach to Tactical Asset Allocation showed a simple trend rule (own assets above their 10-month average) could reduce drawdowns, and his books — The Ivy Portfolio, Global Value, Shareholder Yield — popularised momentum, value and trend-following for ordinary investors.1
2 The Big Idea
What they gave the markets
Simple, transparent, back-tested rules beat complexity for most investors.
Faber's work shows that basic trend and momentum rules, applied with discipline, can manage risk and capture leadership — and that simplicity is a feature, not a flaw.1
3 The Method & Contribution
What he popularised
Trend-following
Own assets above their long moving average; sidestep deep drawdowns.1
Momentum
Tilt toward what's leading — a cousin of relative strength.1
Rules over forecasts
Transparent, back-tested systems instead of opinions.1
4 See It On This Site
Go deeper
On this site
Our Relative Strength and Moving Averages guides connect to Faber's trend/momentum rules.
5 The Work
A Quantitative Approach to Tactical Asset Allocation
A Quantitative Approach to Tactical Asset Allocation
Mebane Faber · 2007 (+ books)- A landmark, simple trend rule for reducing drawdowns.
- Author of The Ivy Portfolio, Global Value, Shareholder Yield.
6 Read More
Go deeper
- CONCEPTRelative Strength & Moving Averages.
- READMeb Faber — about.
§ Sources
- Mebane Faber — Cambria & A Quantitative Approach to Tactical Asset Allocation — mebfaber.com; SSRN.